Rise of Airbnb ‘exacerbating Scotland’s housing crisis’

Calls are growing for local and national authorities to intervene into the increasing use of short-term letting sites which many believe are having a negative effect on Scotland’s housing market.

According to data by Murray Cox, a New York-based community activist and founder of non-commercial data project Inside Airbnb, there were 6,272 listings for Airbnb in Edinburgh at the end of July, the second-highest UK figure by some distance. The Edinburgh data shows that 43.8 per cent are multiple listings and more than half are for entire homes.

But there are concerns that the service is exacerbating Scotland’s housing crisis by using properties that may otherwise have been available to rent or buy.

“Data on Airbnb use in Edinburgh shows significant activity by commercial operators, who have permanently converted residential properties into vacation rentals,” Cox told Scotland on Sunday.

“Although Airbnb describes its business model as ‘hosts’ renting out spare rooms to tourists, the majority of Airbnb properties in Edinburgh are entire homes or flats, where the host isn’t present.”

While Airbnb listings account for only a small proportion of Edinburgh’s housing stock, they tend to be concentrated in areas with low vacancy rates.

“Airbnb rentals could be displacing city residents, and in many other neighbourhoods challenging their residential character,” said Cox.

Almost two-thirds of Edinburgh listings on Airbnb are available for more than 60 days a year, with an average occupancy of 82 nights a year. While in many cases the unoccupied listings will be used by their owners, it seems plenty remain empty while they don’t have guests.

“When Airbnb started it was about spare bedrooms and people going on holiday and letting out their home, it wasn’t something that affected the availability of properties to rent or to buy,” said Stuart Montgomery, director of lettings and management at Rettie & Co.

“It will grow and become like a booking.com or a Tripadvisor, where it’s heavily commercialised and people are making a living out of it.”

One key question for local and national policymakers is the extent to which short-stay rentals displace long-stay accommodation and drive rental prices up, said Dan Cookson, spokesman for PRS 4 Scotland.

“The short-stay rental market has clearly played a key role in enabling Edinburgh’s success as the festival city and provides much-needed accommodation for visitors throughout the year,” he said. “But with the recent rapid expansion of sites like Airbnb there are signs from cities around the world that unfettered short-stay rental expansion may not be entirely benign.”

Housing and homelessness charity Shelter Scotland said it was keeping an eye on services such as Airbnb and their impact on the housing sector.

Alison Watson, deputy director of Shelter Scotland, said: “Our concern would be if people were being displaced due to the lack of affordable housing caused by fewer homes or rooms for rent becoming available.”

Dan Cookson said Edinburgh and other cities in Scotland need “workable policies” to address concerns about short-stay lets – but they first need to know more about the market so they can measure its impact.

He added: “The challenge is both understanding the full extent of short stay from more than a single player within the market and then formulating a policy that can actually be enforced.”

Any crackdown should focus on “professional” hosts with multiple homes let out, said Cox.

“In most cities that are concerned about housing and the illegal conversion of residential properties via short-term rental platforms like Airbnb and their hosts, multiple entire home listings are usually the first to be the subject of regulation and enforcement.”

Yet policies such as the cut in tax relief on mortgage interest for buy-to-let and new private rented sector rules in Scotland may make the holiday lets model more attractive.

“The new PRS tenancy in Scotland exposes landlords to greater risk of tenants leaving very shortly after signing a tenancy,” said Cookson. “In this context some landlords may be attracted by the short-stay rental market, which may mean a loss of long-term provision.”

Established in the US in 2008 as Airbedandbreakfast.com, the popularity of Airbnb in the UK has rocketed over the past four years and it now has more than two million listings worldwide, including over 80,000 in the UK.